Debate over renewable energy ballot issue heats up

Sunday

Jun 24, 2012 at 12:01 AMJun 24, 2012 at 7:53 AM

The debate over increasing Michigan’s renewable energy requirements is starting to heat up faster than a solar panel on a cloudless summer day.

Supporters say passing a ballot measure in November requiring that utilities get more of their electricity from renewable sources would make Michigan a leader in clean energy and create jobs. Opponents say it would cost electric customers more money and make it harder for utilities to provide a reliable energy supply.

On Monday, opponents with the Clean Affordable Renewable Energy (CARE) for Michigan Coalition plan to ramp up statewide efforts to defeat the issue, arguing the requirement doesn’t belong in the state constitution. Supporters, meanwhile, have taken the unusual step of lining up both Democratic and Republican consulting firms to make the case that increasing the requirement with a public vote this fall is the way to go.

The fight could create plenty of sparks this summer, in part because it’s really a business-vs.-business tussle. The measure pits “green” Michigan manufacturers such as Power Panel Inc. and Dow Chemical Co. against coal and natural gas suppliers and Michigan businesses that fear the move could mean higher electric rates.

“Michigan can be a global leader in clean energy manufacturing, but we have to start with the way we power our own homes and businesses,” said Adam Stranton, vice president of Power Panel, which employs a dozen workers at its Detroit plant to manufacturer panels combining photovoltaic collectors and solar thermal collectors.

Both the Michigan and Detroit Regional chambers oppose the proposal, which would require more than 80 electricity suppliers statewide to obtain 25 percent of their power from wind, solar, biomass or hydropower by 2025.

The current requirement, passed by lawmakers in 2008 as part of a rewrite of the state’s energy law, requires that they get 10 percent from renewable sources by 2015.

The state’s two largest utilities, Jackson-based Consumers Energy and Detroit-based DTE Energy, have invested in wind farms around the state and are in line to buy power generated by privately owned wind farms. Consumers Energy already has 13 hydroelectric dams that count toward the renewable energy requirement and currently gets 5 percent of its energy from renewables, while DTE Energy currently gets 5.5 percent.

Both companies say they’re on track to meet the 10 percent requirement by the deadline, but warn it would cost $12 billion and require 3,100 more wind turbines spread over an area 17 times larger than the city of Grand Rapids to meet the 25 percent requirement by 2025, pushing up customers’ costs.

“Our position is that the current standard is reasonable. It’s affordable for customers,” Consumers Energy spokesman Jeff Holyfield said Friday. “Let’s meet that mark and determine what’s the best course after that.”

Dianne Byrum, a spokeswoman for the Michigan Energy Michigan Jobs coalition pushing the measure, says that approach isn’t good enough.

“If we don’t start planning now for what happens after 2015, we’re going to be behind other states,” she said.

Supporters hope to turn in around 500,000 signatures by the July 9 deadline. They must have 322,609 valid signatures to get on the Nov. 6 ballot.

If the measure wins voter approval, it’s likely to end up in court because of a provision that limits utility customers’ annual rate increases to cover renewable energy to 1 percent. Holyfield said supporters can’t expect utilities to invest far more in renewable energy without a way to pass along the cost to customers. Supporters say the utilities already have gouged customers with higher rates, including double-digit increases over the past year for some.

A provision in the ballot measure means that if the measure passes and the rate hike limit were struck down, the 25 percent requirement likely would remain in effect.

Studies by independent economists predict the higher standard would cost the average Michigan household less than $15 dollars in any one year and could reduce energy bills in the long run, according to coalition of public health, labor and environmental groups backing the proposal. They note that 20 other states — including Illinois, Minnesota and Iowa — already have adopted similar measures without significant increases in utility costs for consumers.

They estimate that the higher standard would bring $10 billion of new investment to Michigan and encourage the growth of companies that make solar equipment, wind turbines and batteries, such as Dow Corning, Energetx Composites and A123 Systems. The coalition also notes that utility customers’ money spent on renewable energy would stay in Michigan, unlike the more than $1.8 billion spent to import coal for power plants, and lead to cleaner air, water and land.

Mark Pischea a partner at Sterling Corp., a Republican consulting group that has paired with Byrum’s Democratic consulting group, Byrum & Fisk Advocacy Communications, to promote Michigan Energy Michigan Jobs. He views the higher standard as an opportunity for businesses.

“We’ve got the talent, we’ve got the manufacturing experience, we’ve got the know-how,” Pischea said. “All we’re missing is that government piece that says, ‘This is a framework that you’re operating under.’”

The following new Section 55 would be added to Article IV of the Michigan Constitution:

55 Michigan’s Clean Renewable Electric Energy Standard
It is the policy of Michigan to promote and encourage the use of clean renewable electric energy sources. Clean renewable electric energy sources, which naturally replenish over a human rather than geological time frame, are wind, solar, biomass and hydropower.
Beginning no later than 2025, at least 25 percent of each electricity provider’s annual retail electricity sales in Michigan shall be derived from the generation or purchase of electricity produced from clean renewable electric energy sources. The foregoing clean renewable electric energy standard shall be implemented incrementally and in a manner that fosters a diversity of energy generation technologies. Facilities used for satisfying the standard shall be located within Michigan or within the retail customer service territory of any electric utility, municipally-owned electric utility or cooperative electric utility operating in Michigan.
Consumers shall be charged for electricity from clean renewable electric energy sources in the same manner and on the same basis as for electricity from other sources.
To protect consumers, compliance with the clean renewable electric energy standard shall not cause rates charged by electricity providers to increase by more than 1 percent in any year. Annual extensions for meeting the standard may be granted, but only to the extent demonstrated to be necessary for an electricity provider to comply with the foregoing rate limitation.
The legislature shall enact laws to promote and encourage the employment of Michigan residents and the use of equipment manufactured in Michigan in the production and distribution of electricity derived from clean renewable electric energy sources.
Any provision or portion of this section held invalid or unconstitutional shall be severable from the remaining portions, which shall be implemented to the maximum extent possible.

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